A problem shared is a problem halved?

Following an extraordinary rate cut of 1.5% earlier this month, Gordon Brown met with world leaders on Friday to convince them that a collective effort is needed to bring the economy out of its current crisis.

A meeting of the so called 'G20' was convened to agree on a worldwide action plan to get the economy out of the financial crisis. Countries that attended the summit included USA, China, Germany, India, Japan and the UK and represented approximately 85% of the world economy.

There has been some criticism that countries from Africa have not been included in the G20 and that there were no ‘poor’ countries present who may be negatively impacted on by the decisions made at the meeting. The media  reported that there were few concrete plans made and that the only outcome of the meeting was that the G20 agreed to do ‘something’ without specifying what that ‘something’ might be.

The key issues that were agreed on by the world leaders included:

• "reform of international financial institutions such as the World Bank and the International Monetary Fund"
• "an agreement by the end of 2008, leading to a successful global free-trade deal improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions"
• "making sure banks and financial institutions' incentives "prevent excessive risk taking"
• "asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system"

Whilst there have been attempts by each individual country to stabilise their own economies, this is the first time during the current crisis that world leaders have joined together to find a solution. It remains to be seen how much of an impact these changes will have.

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